Questions on moving 401K to Roth IRA CD and taxes?
Questions on moving 401K to Roth IRA CD and taxes?
I moved some money last year from a 401k funds to a Roth IRA CD at a bank. However, I am wondering how this works for tax purposes. I did make a little interest on it. However, it was less than 200$. How does this work for tax reasons? Is the whole amount taxable, the interest, or none at all?
Answers:
jlf: You need to be more specific. Was it a conventional 401(k) account? And you converted that to a Roth? Or did you just withdraw your 401(k) and then start a Roth IRA?
2010-01-26 11:41:55
2010-01-26 11:41:55
the tax lady: 401K is pre-tax money.
Roth is after-tax money.
The $ you moved is taxable in the tax year you moved it.
The income AFTER you moved it is not taxable.
2010-01-26 11:51:46
2010-01-26 11:51:46
Chosen Answer
tro: depends on the type of Roth-- the tax free Roth you would have had to pay the tax on the amount you converted if it is a reg IRA, the same type as your 401 K, the interest accrues and you pay when you take distribution
2010-01-26 12:30:32
tro: depends on the type of Roth-- the tax free Roth you would have had to pay the tax on the amount you converted if it is a reg IRA, the same type as your 401 K, the interest accrues and you pay when you take distribution
2010-01-26 12:30:32